Insurance can be a very confusing subject and although homeowners insurance is one of the most common types, it is still very misunderstood. Plenty of homeowners overestimate the amounts of coverage they are receiving and believe their policy covers everything, but there are actually many exclusions and complexities when it comes to homeowners insurance. Here are common myths about homeowners insurance:
1. Homeowners insurance covers flood and earthquake damage
Many natural disasters are covered by homeowners insurance, such as lightning, wildfires, and even volcanic eruptions, but a standard homeowners policy doesn’t cover flood or earthquake damage. If you live in an area susceptible to either, it’s best to talk to your agent about a separate policy.
2. Homeowners Insurance Is/Isn’t Mandatory
If you’re paying off a mortgage the mortgage lender will require you to invest in homeowners insurance, but if you pay for a home in full you are not required to have a homeowners policy, but not having one is extremely risky business.
3. You will be covered if you’re injured at home
The liability coverage that is included in your homeowners policy is meant to cover the medical expenses of other people who are injured on your property, not you. You must have health insurance to be covered in this case.
4. Homeowners insurance covers damage from mold/infestations
If the mold is a result of a long-term leak or other forms of poor maintenance, it will not be covered. Infestations can be extremely destructive, such as termites, but are not covered as insurance companies see it as poor maintenance.
5. Home businesses are covered under homeowners insurance
Standard policies do not cover home business. If a customer or employee are injured at your home business it will not be covered unless you have added a business endorsement or an in-home business policy.
6. Your insurance will provide for you if you lose your home:
If your home is destroyed or damaged to the point that you cannot live in it while it’s under repairs, you may think that your insurance policy will cover your living expenses until your home is repaired. If your policies includes loss-of-use coverage then you’re right, but many policies do not.
7. Premiums go up every time a claim is filed
A single claim will not necessarily cause a premium increase, though it’s always best to estimate cost of repairs before filing a claim. If the cost of the repairs is less or not much higher than your deductible , then it would be a better idea to pay for the damages yourself.
Due to all the myths and confusion, it’s always best to speak with your agent about anything about your policy that is unclear to you. Contact us if you have any questions at (480) 535-5709.